2025 Supreme(Online)(Mad) 36140

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P. Velmurugan, K.K. Ramakrishnan, JJ
District Collector, Dindigul District – Appellant
Versus
C.Muthukalyani @ Muthukannan – Respondent
A.S.(MD) Nos.143, 146, 147, 154, 164, 194, 269, 317, 319 &326 of 2023 | A.S.(MD)Nos.6, 73, 128, 232, 233, 234, 236, 237, 239, 243, 244, 245, 248, 249, 266, 267, 268, 273 of 2024 | C.M.P.(MD) Nos.7914, 7959, 7983, 8433, 8846, 11152, 14766, 17202, 17311, 17651 of 2023 | C.M.P.(MD).Nos.130, 4900, 6769, 12387, 12389, 12392, 12429, 12431, 12476, 12667, 12674, 12682, 13029, 13080, 13763, 13764, 13766, 14392 of 2024

The court applied the belting method and guesstimation principle where evidence was insufficient to determine market value based on 'willing seller-willing buyer' principle, and correctly applied the multiplier factor of 2 for rural areas under RFCATLARR Act.

Headnote:(A) Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 - Section 74 - Market value determination based on 'willing seller-willing buyer' principle at arm's length (as per Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer (1939) AC 302; Waters and others vs. Welsh Development Agency (2004) 1 WLR 1304) - Guesstimation principle applicable when evidence is insufficient (as per Kamta Prasad Singh v. State of Bihar (1976) 3 SCC 772; Trishala Jain v. State of Uttaranchal (2011) 6 SCC 47) - Belting system methodology for land valuation with varying road frontage (as per Mathura Prosad Haigharia v. State of West Bengal (1970) 3 SCC 730) - Multiplier factor of 2 correctly applicable per Central Government notification (S.O.425(E) dated 09.02.2016) (Paras 8.1, 12.2, 12.5, 14).

(B) Court applied principle of guesstimation to determine fair market value where there was no direct evidence of sales in vicinity, using the belting method to assign different values based on proximity to roads (front belt, middle belt, rear belt) with value declining as distance from road increased. (Paras 15-20, 22.3)

Facts of the case:
The State government acquired 101,451 sq.mtrs of dry land for highway development (four-lane road and strengthening of existing road). Land Acquisition Officer fixed different rates for different survey numbers/groups without justification. Principal District Judge adopted a uniform rate of Rs.5,390/- per sq.mtr with multiplier factor 2. State appealed this decision as it was irrational.

Findings of Court:
The Court determined market value based on proximity to roads: front belt (Rs.5,390/-), middle belt (Rs.5,000), subsequent belts (Rs.4,700 to Rs.3,600). Multiplier factor of 2 was correctly applied. Appeals were allowed in part with compensation amounts reduced.

Issues: The main issues were 1) whether Land Acquisition Officer correctly fixed different market values for different survey numbers within same groups; 2) whether Principal District Judge correctly applied uniform rate and multiplier factor; 3) what is the fair market value based on the belting system.

Ratio Decidendi: The Court held that market value for compensation must be determined as the price at which a property would sell between a willing seller and willing buyer at arm's length. When direct evidence is insufficient, courts may apply guesstimation with caution, considering the closest comparable examples. The belting method was appropriate to determine differential values based on road frontage in contiguous land acquisition.

Result: Appeals allowed in part, compensation amounts reduced to new values determined by the Court's application of the belting method and guesstimation principle.

Table of Content
1. market value determined by willing buyer-willing seller principle (Para 8 , 9)
2. guesstimation principle applied in valuation (Para 12)
3. belting system valuation method accepted (Para 13 , 14)
4. segment-wise market valuation based on location (Para 15 , 16 , 17 , 18 , 19)

COMMON JUDGMENT

(Judgment of the Court was made by K.K.RAMAKRISHNAN , J.,)

Summary of Discussion	Paragraph Nos
Prelude	1
Brief facts of the case	2-2.6
Submission of Learned Additional Advocate General	3-3.5
Submission of Learned Counsel for the Respondent/Land owner	4-4.2
Points for Determination	5-5.1
Discussion on Facts	6-6.5
Discussion on Merits	7
Meaning of Market Value	8
Consider factor lay down by Hon’ble Supreme Court to Determine Market Value	9-9.4
Merits and demerits of the General patten by LAO	10-10.9
Merits and De-merit of the award passed by the PDJ	11-11.1
Principle relation to the applicant of Doctrine of Guesstimation	12-12.5
Theory of Belting System	13-13.2
Principle relation to the applicant of belting system	14-14.1
Determination of fair market value of segment Nos.1&2	15
Determination of the compensation of S.Nos.409/1B2, 409/102B, 410/1A, 410/1B1A, 410/1B3, 409/1A2A, 419/2A, 420/2A	16-16.4
Determination and compensation of the S.Nos.431/1B2A, 432/2A, 432/2B	17-17.1
Determination of the Compensation to remaining S.Nos.430/2A, 430/B2A, 439/1C, 441/2, 441/2B, 447/2, 638	18-18.1
Determination of the Compensation of Segment Nos. 2	19-19.6
Determined value of both segment Nos. 1&2	20-20.1
Determination of market value Segment No.3	21-21.3
Determination of Multiplier Fact	22-22.3
Final Conclusion	23-23.11

Prelude:

“the right to compensation for compulsory acquisition is a basic property right. It is unfortunate that ascertaining the rules upon which compensation is to be assessed can involve such a tortuous journey, through obscure statutes and apparently conflicing case law, as has been necessary in this case

The above observation of the Carnwath LJ's views in Judgment of the Court of Appeal reported in 2003 (4) ALL ER 384 echoed by The House of Lords in the case of “Waters and others vs. Welsh Development Agency, reported in (2004) 1 WLR 1304 as follows:

Unhappily the law in this country on this important subject is fraught with complexity and obscurity. To understand the present state of the law it is necessary to go back 150 years to the Lands Clauses Consolidation Act 1845 (8 & 9 Vict c 18). From there a path must be traced, not always easily, through piecemeal development of the law by judicial exposition and statutory provision. Some of the more recent statutory prov isions defy ready comprehension. Difficulties and uncertainties abound

All courts face similar situations while dealing with cases relating to land acquistion compensation cases in the process of arriving at market value of the acquired property due to complexity, obscurity, difficulty and uncertainty in the development of law by judicial exposition and statutory provision in the process of the determination of the compensation.

Here also, this Court is entangled with similar problem in determining the market value as this court has to find a balance between the extreme disparity in the award passed bythe Land Acquisition Officer and extreme irrationality in the award passed by the learned Principal District Judge.

2. Brief facts of the case

2.2. Before delving into the tortuous process of determination of market value in this case, to cut the long story short, the following brief facts are necessary:

2.3. The Government is appellant and has filed these appeals against enhancement of compensation made in various L.A.O.Ps., by the learned Acquisition Rehabilitation and Resettement Authority/ Principal District Judge, Dindigul, for the acquired lands situated in various survey Numbers of Kallimandayam Village, for laying four lane road and strengthening the oddanchathram- Dharapuram-Tiruppur Road (SHNo.37)

2.4.Total extent of 101451 sq.mtrs of Dry lands in Kallimandayam Village, Dindigul District had been acquired f

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